Collecting on Overdue Accounts
Five steps can help your cash flow without endangering it
While you don’t want to destroy any potential or established business relationships by laying down harsh payment terms, you must take some control of your account receivables to avoid wreaking havoc with your cash flow. You’re not a bank, after all.
These five steps can help your cash flow without endangering it.
1. Watch for new customers with a bad credit history. You can’t expect that a company or a person with a history of bouncing checks or paying their bills late will change their ways when dealing with you. If you must do business with the chronically late, lay down your credit rules early and firmly and starts the relationship off slowly. Keep the amount of product or services you offer a company with an iffy credit record to a minimum until they’ve proven themselves worthy. And no matter how much you need the business, never start doing business with another person or company until you have a signed contract clearly stating and agreeing to payment terms.
2. Once you begin doing business with someone, make sure you stamp your invoices with the date that payment is due to you. Don’t rely on the customer to look at the invoice date and add 30 days -- or whatever your payment terms are -- to determine the pay date.
3. Offer discounts for early payment and add interest to late payments.
4. Phone customers and start trying to collect the day after a payment is due. Never wait -- let them know that you keep close track of your accounts receivable.
5. Until a customer pays their bills, don’t do any more business with them. Do not bend on this rule -- you’ll only cause yourself more problems and scuttle any chance of collecting what you’re owed. If you really want to keep doing business with a customer who owes you, insist that any new products or services they receive from you are c.o.d. -- cash on delivery.
For more information please contact Collection Agency
National Asset Management, LLC
P.O. Box 840
Moon Twp, PA 15108
877-299-6276 (Toll Free)